Reliance Do Brasil Indústria E Comércio De Produtos Têxteis, Químicos, Petroquímicos E Derivados Ltda.

Transcription

1 977 Reliance Do Brasil Indústria E Comércio De Produtos Têxteis, Químicos, Petroquímicos E Derivados Ltda.

2 978 RELIANCE DO BRASIL INDÚSTRIA E COMÉRCIO DE PRODUTOS TÊXTEIS, QUÍMICOS, Independent Auditor s Report To the Quotaholders and Management of Reliance Do Brasil Indústria E Comércio De Produtos Têxteis, Químicos, Petroquímicos E Derivados Ltda. We have audited the accompanying financial statements of Reliance Do Brasil Indústria E Comércio De Produtos Têxteis, Químicos, Petroquímicos E Derivados Ltda., which comprise the balance sheet as at December 31, 2014, and the income statement, statement of changes in equity and cash flow statement for the year then ended. 1. Management Responsibilities for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the accounting standards applicable in Brazil, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material mistatement, whether due to fraud or error. 2. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material mistatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 3. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Reliance Do Brasil Indústria E Comércio De Produtos Têxteis, Químicos, Petroquímicos E Derivados Ltda. as at December 31, 2014, and its financial performance and its cash flows for the year then ended in accordance with the accounting practices adopted in Brazil. São Paulo, March 2, Magalhães Andrade S/S Auditores Independentes CRC2SP000233/O-3 (independent auditors) Guy Almeida Andrade Partner Accountant CRC1SP116758/O-6

3 979 Balance Sheet as at December 31, 2014 and 2013 ASSETS CURRENT ASSETS Cash and cash equivalents 15, , Accounts receivable from related companies (note 3.a) 79, , Tax credits (note 4) - 5, Travel expenses advances - 17, TOTAL OF ASSETS 94, , LIABILITIES AND QUOTAHOLDERS EQUITY LIABILITIES Current liabilities Accounts payable 9, , Labor accruals (note 5) 1, , Tax payable (note 6) 8, , Provision for income tax and social contribution (note 7) - 1, Accounts payable to management, net 31, TOTAL OF LIABILITIES 50, , QUOTAHOLDERS EQUITY Subscribed capital (note 8) 1,600, ,600, Unpaid capital (121,038.00) (121,038.00) Paid up capital 1,478, ,478, Accumulated losses (1,434,465.31) (1,414,159.00) TOTAL OF QUOTAHOLDERS EQUITY 44, , TOTAL OF LIABILITIES AND QUOTAHOLDERS EQUITY 94, , See accompanying Notes to Financial Statements

4 980 RELIANCE DO BRASIL INDÚSTRIA E COMÉRCIO DE PRODUTOS TÊXTEIS, QUÍMICOS, Income Statement for the year ended December 31, 2014 and 2013 REVENUE 362, , Less service tax 18, , NET REVENUE 344, , OPERATIONAL EXPENSES General and administrative (note 9) 356, , Taxes 1, , , , PROFIT (LOSS) BEFORE FINANCIAL RESULT (13,869.26) 30, FINANCIAL RESULT Financial revenue Financial expenses 6, , (6,437.05) (6,195.23) PROFIT (LOSS) BEFORE INCOME TAX (20,306.31) 23, Social contribution on income (note 10) - (1,511.62) Income tax (note 10) - (2,519.36) - (4,030.98) NET PROFIT/(LOSS) FOR THE YEAR (20,306.31) 19, See accompanying Notes to Financial Statements

5 981 Statement of Change in equity for the year ended December 31, 2014 and 2013 Capital Accumulated Losses Total Balance at 31st December ,478, (1,435,625.58) 43, Prior year adjustment - 1, , Profit for the year - 19, , Balance at 31st December ,478, (1,414,159.00) 64, Loss for the year - (20,306.31) (20,306.31) Balance at 31st December ,478, (1,434,465.31) 44, See accompanying Notes to Financial Statements

6 982 RELIANCE DO BRASIL INDÚSTRIA E COMÉRCIO DE PRODUTOS TÊXTEIS, QUÍMICOS, Cash Flow Statement for the year ended December 31, 2014 and 2013 CASH FLOW FROM OPERATIONS Profit (Loss) for the year (20,306.31) 19, (Increase) Decrease of asset accounts Accounts receivable (27,762.80) 6, Tax credit 5, , Travel expenses advance to management 17, (16,050.72) Increase (Decrease) of liability accounts Accounts payable 1, Labor accruals Provision for income tax and social contribution (1,322.55) 1, Taxes 1, , Net cashflow from operation (24,746.77) 22, CASH FLOW ASSOCIATED WITH FINANCING Expenses paid by manager 31, Amount reimbursed to manager - (15,807.85) Net cash from finance operations 31, (15,807.85) NET CHANGE IN CASH AND CASH EQUIVALENTS 6, , CASH AND CASH EQUIVALENTS At the beginning of year 8, , At the end of year 15, , NET CHANGE IN CASH AND CASH EQUIVALENTS 6, , See accompanying Notes to Financial Statements

7 983 Notes to Financial Statements for the year ended December 31, OPERATIONAL CONTEXT The Reliance do Brasil Indústria e Comércio de Produtos Têxteis, Químicos, Petroquímicos e Derivados Ltda. (Company) is a limited company, constituted under the Brazilian legislation. The Company s business are (a) the promotion of sales of textiles products, chemical, petrochemical and their derivatives produced by associated companies; (b) consultancy in the areas of textiles products, chemical and petrochemical, importing and the exportation of telecommunications products; and (c) the investment in other companies in Brazil or abroad as a shareholder or quotaholder. 2. FINANCIAL STATEMENTS PRESENTATION The financial statements were prepared and are being presented in accordance with the accounting practices adopted in Brazil, including the pronouncements issued by the Accounting Pronouncements Committee (CPC), as well as the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). All references to the Pronouncements of the CPC shall also be understood as references to the corresponding IFRS Pronouncements, and vice versa, and it should be noted that, in general, the early adoption of revisions or new IFRSs is not available in Brazil. The main bases of evaluation used in the accounting estimates are here summarized: a) Cash and cash equivalent Cash and cash equivalents are presented at fair value. b) Accounts receivable The balance refers to representation services receivable in the following year. Any bad debt is considered for the constitution of a provision. Management considers that there are no risk of doubtful accounts. c) Revenue and expenses Service revenues and expenses are recorded on the accrual basis. 3. RELATED PARTY TRANSACTIONS a) Accounts receivable from related companies The Company is a subsidiary of Recron (Malaysia) Sdn. Bhd., for whom it provides contract services with prospective customers and receives fees for such. The related party transactions described below were carried out on terms, conditions and prices negotiated and agreed between the parties. In 2014, the invoices issued by the Company against Recron (Malaysia) Sdn. Bhd. totaled R$ 362, (R$ 320, in 2013). As on 31 st December, the balance in accounts receivable with its related party was as follows: Recron (Malaysia) Sdn. Bhd. 79, , b) Economic dependence Recron (Malaysia) Sdn. Bhd. is the only customer of the Company and the Company is entirely dependent on this contract. 4. TAX CREDITS Social Contribution on net profit to be offset - 3, Corporate income tax to be offset - 1, ,054.85

8 984 RELIANCE DO BRASIL INDÚSTRIA E COMÉRCIO DE PRODUTOS TÊXTEIS, QUÍMICOS, Note to Financial Statements for the year ended December 31, LABOR ACCRUALS Balance consists of an accrued labor charge on Management fees. 6. TAX PAYABLE The stated balance refers to the Service Tax calculated on Service Revenue and is related to services rendered in December of each year with due date in the following January. 7. PROVISION FOR INCOME TAX AND SOCIAL CONTRIBUTION Due to the loss for the period, there is no income tax to be paid. The related tax credit is not accrued due to the uncertainty related with the Company s capacity to recover it. 8. CAPITAL As on 31st December 2014 and 2013, the subscribed capital of R$ 1,600, consists of 1,600,000 shares with a nominal value of R$ 1.00 each, that belongs to Recron (Malaysia) Sdn. Bhd and Reliance Global Business BV, as shown below. The unpaid capital of R$ 121, will be paid until January 7, Quotas Value Quotas Value Paid Capital Recron (Malaysia) Sdn. Bhd. 1,478,962 1,478, ,478,962 1,478, Total paid in capital 1,478,962 1,478, ,478,962 1,478, Unpaid Capital Reliance Global Business B.V Recron (Malaysia) Sdn. Bhd. 121, , , , Total unpaid capital 121, , , , Total capital 1,600,000 1,600,000,00 1,600,000 1,600,000,00 9. GENERAL AND ADMINISTRATIVE EXPENSES Management fees 72, , Outsourced services (note 9.a) 26, , Travel expenses (note 9.b) 94, , School (note 9.c) 93, , Telephone and communication expenses 26, , Medical assistance (note 9.d) 25, Lease 3, , Other 14, , , ,944.99

9 985 Note to Financial Statements for the year ended December 31, 2014 a) Outsourced services Refers to services provided by third parties relating to accounting and auditing fees. The balance in 2013 includes legal assistance also. b) Travel expenses Refer to expenses incurred by management in sales prospecting. c) School expenses According to the employment contract entered into, the Company pays the costs of the manager child s education. In 2014, the Company paid R$ 37,205 related to a difference in the school fees of d) Medical assistance The amount refers to medical assistance to manager and his family. 10. INCOME TAX AND SOCIAL CONTRIBUTION Income tax is calculated at the rate of 15% of basis for calculation of income tax, plus 10% on the amount of profit exceeding R$ 240 thousand. Social Contribution is calculated at the rate of 9% on the same basis for calculation.. Reconciliation between profit (loss) for the year and the basis for calculation of income tax Profit (Loss) for the year, before income tax - 23, Non-deductible expenses - - Accumulated loss compensation - (7,198.17) Basis for calculation of income tax and social contribution - 16, Social contribution on income 9% of basis for calculation - 1, Income tax 15% of basis for calculation - 2, Income tax and social contribution for the year - 4,030.98